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Apple Plans to Purchase Universal Music
mrbiiggy writes "Apparently Apple has been plotting to purchase Universal Music for $6 billion, reports Spiegel Online (read the Google translation). Who knew Apple even had that kind of cash? (The L.A. Times is also reporting this, free reg required.)"
lots of people. remember when their stock took a hit a year or so ago and people were wondering what the fate of apple would be? then also remember that news came out they had over 12 billion in cash assets. yeah apple is a huge company. they may not have market share yet in the OS world but they are a very very large company. make no mistake.
According to Apple's financial reports, they had 4.4 billion dollars in cash reserves. Vivendi, who currently own Universal, has somewhere between 6 and 7 billion dollars of debt, so I don't think Apple is going to be able to pay part cash, part stock. Vivendi is just looking to get out.
What I'm waiting to see is how this interacts with Apple's new music service which supposedly debuts next month. Nice catalog of music to choose from.
Or read the Altavista Babbelfish translation:
? urltext=http://www.spiegel.de/wirtschaft/0,1518,24 4270,00.html&lp=de_en&doit=done
http://babelfish.altavista.com/babelfish/urltrurl
Moderation: +4. Modded 70% Funny and 30% Overrated. 100% Saturated.
Some anonymous Google translation doesn't do this justice. This is Big. Very big. Changing the way the world does business big.
Adapt or die, as Lessig says.
Wow.
(Not logged in due to copyright infringement, and fear of being called a Karma Whore...)
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Apple Reportedly in Talks to Buy Universal Music
A deal could yield up to $6 billion for parent firm Vivendi and make tech maverick Steve Jobs the most powerful figure in the record business.
By Chuck Philips
Times Staff Writer
April 11, 2003
In a pairing that would alter the architecture of the music business, Apple Computer Inc. is in talks with Vivendi Universal to buy Universal Music Group, the world's largest record company, for as much as $6 billion, sources said.
Such a seemingly unlikely combination would instantly make technology guru Steve Jobs, Apple's co-founder and chief executive, the most powerful player in the record industry.
Universal, which reaps about $6 billion in sales annually from artists such as 50 Cent, Shania Twain, U2 and Luciano Pavarotti, would be controlled by a maverick who revolutionized the computer market and coined the mantra "rip, mix, burn," which many in the music business read as an invitation to electronic piracy.
The discussions, a closely held secret for several months, could founder over unresolved issues. Apple hasn't made a formal bid but may offer $5 billion to $6 billion for the music company before Vivendi's April 29 board meeting, according to the sources.
Jobs and other Apple representatives declined to comment, as did representatives of Universal Music Group and Vivendi Universal.
The Cupertino, Calif.-based computer maker's surprise play for Universal Music could alter the dynamics of the bidding for Vivendi's entertainment assets. The French giant, in a move to reduce debt, seeks to raise $7 billion this year by selling assets that probably would include some or all of its Universal film, television, theme park and music units.
Investor Marvin Davis has offered about $13 billion for 65% of the entertainment assets and has been the only known bidder to express serious interest in the music company. A separate sale of the music operation would appear to work in favor of Liberty Media Corp. and others that are focused on the company's other entertainment properties.
Jobs' pursuit of Universal comes at a time when Apple, with less than 3% of the desktop computing market, has been struggling to find its next wave of growth and the music industry has been buckling beneath the pressure of online piracy and falling sales.
Defying conventional wisdom, Jobs apparently is betting that music is finally on the verge of becoming a profitable presence on the Internet. Apple has been quietly testing a service that some music business insiders believe could pave the way for widespread online distribution of songs.
People who have tried the service, expected to debut by the end of April, say it makes downloading and purchasing music as simple and nontechnical as buying a book from Amazon.com. It allows users to buy and download songs to their computers with a single click and to transfer the music automatically to their portable MP3 players.
The computer maker, known for its iMac desktop computer and other high-profile products, posted an $8-million loss on sales of $1.47 billion for its fiscal first quarter ended Dec. 28 -- marking the company's first back-to-back quarterly losses since Jobs returned to the CEO post in 1997. Apple has annual sales of about $5.74 billion and had about $4.4 billion in cash, cash equivalents, and short-term investments as of Dec. 28.
Jobs, who also is chairman of Pixar Animation Studios, helped found Apple in 1976, then stepped down as its chief nine years later to launch Next Inc. He returned to Apple when it acquired Next.
Universal Music Group, which saw operating profit slide 23% to $510 million last year, dominates the industry in 63 territori
...remember that Apple has been planning its own online music-buying service for a while now, having announced it just last month. Obviously this is a BIG step towards making that successful for themselves.
Wall Street doesn't appear to approve - Apple's stock is down about 2% on light volume.
Stop by my site where I write about ERP systems & more
Since they are buying Universal, which is an established brand...I would imagine that they will merely keep the name but make them a legal subsidiary of Apple.
"To any truly impartial person, it would be obvious that I am right."
I've done a run of 30,000 CDs for around 30 US cents per CD. With higher volumes, that would obviously be lower.
If you were doing a million, I dare say the cost would be under 10 cents each.
The Washington Post Story Your karma whoring friend... --T
http://www.theMediaBunker.com
Hence why their cash reserves make up most of their stock price. It's ridiculous. Apple is the bastard child of stocks, with a ridiculously low price-to-earnings/price-to-assets ratio because nobody actually invests in it but fanatics, while some people do pump-and-dump (they let others pump; they only dump) around MacWorlds.
---- My Design, Code, Ruby on Rails blog: http://www.slash7.com/
QuickTime is, however, ridiculously extensible... to the point where you could easily add DRM-like behaviour to it. There are controls now for specifying really simple things, like 'don't allow user to save movie', etc. There's no certificates or signing in/out or any of that.
If Jesus wants me it knows where to find me.
Who knew Apple even had that kind of cash?
Dude, even in Apple's darkest days (pre-reentrance of Steve Jobs) under the stewardship of John Scully and Gil Amelio when all the sign painters in Cuppertino were all geared to start posting "Out Of Business" signs all over Infinite Loop...even in their DARKEST hours...they were still worth over 30 Billion dollars. Only a mega-corp of their size could've weathered the 30 Megaton business blunders they themselves created. 6 Billion? Especially! now that Apple is profitable again is chump-money!
Quod scripsi, scripsi.
They also have an interesting article over on The Register.
I thought we had killed this one... Ok, one more time from the top:
Apple has 3%-5% of the PC market. This means in studies about what retail chains sell, 3-5% of those computers are Apple.
This does not include direct-order, such as web or catalog sales, or the Apple stores themselves.
Having said that, 3-5% of the absolutely gigantic computer market is still quite huge.
Apple has around 25-30 million working Macs out in the world. Maybe half of them are OS X-compatible right now.
Put in another perspective, there are about 40 million Playstation 2s in the world. So yes, the market is fine. They make money.
And besides, what makes you think they're going to sell this music (if its true) just to Mac owners? How crazy is that? You think you're gonna need a Mac to listen to U2?
If Jesus wants me it knows where to find me.
Black Eyed Peas
Blackalicious
DJ Shadow
GZA
Jurassic 5
Planet Asia
Rahzel
Redman
The Roots
Sure there is manufactured crap, but there is also some true talent on Universal or their subsidiaries. (You can probably tell what style of music I'm listening to, but the same holds true for every genre.)
sin(6cos(r)+5A)
There's a bug in the MP3 VBR playback. Basically, the iPod requires your MP3 to have a Xing header on it, not the newer Fraunhoffer VBR header. My encoder produces VBRs with Fraunhoffer headers not Xing, so I always have to post-process them. The bug manifests itself if you pause, fast forward or rewind - doing so causes the iPod to lose the correct track length and it usually cuts the track off early.
Fortunately, another Slashdotter pointed me to the (Windows-based) solution - a utility that adds a Xing header. It can be had from here, in the Downloads section.
Cheers,
Ian
I think you mean Beatles.
If you did mean Beetles, then that would be the Rolling Beetles!!!
And if the Universal deal goes through, they would be Apple artists!
I don't work at a record store, but I have worekd in retail. usually the suggested retail value it double the cost the the retailer. that means that CD's that a seggested for 16.00 to 18.00 cost the retailer 8.00 to 9.00.
the cost of cd stamping, printing, assembling, and distribution I have heard is around 2.00 a CD in reasonable volume. most CD's at stores I go to cost around 13 to 16 dollors.
that means the store is making between 5 (13 minus 8) and 7 (16 minus 9) dollors a CD. and the record company makes between 6 and 7 dollors a CD.
Of course there my be a middle man between the two not owned by the record company that drops the companyies cut some. But if not the profit is about equal and slightly favoring the companies.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
When the Macintosh II came out with greatly expanded sound capabilities built in (not as an add-on MIDI card), Apple performed one of the most famous corporate "jokes" of all time, naming one of the new, high-quality system alert sounds "Sosumi" (Pronounced "So, sue me"). I don't think Apple Records (if they are even still around) ever took them up on it.
I'm a lawyer with excellent karma. Something's gotta be wrong.
yeah, that 1 time purchase of $150 million in NON-VOTING stock that MS sold long ago sure is saving their ass right now! Stock purchased in '97 and sold a little less than two years later.
There's no truth in your statement by which to be hurt. Check your facts you pathetic troll.
Pooty tweet
Stores do NOT make that much per single CD. Never have, never will. When I worked in an independently-owned record store, we paid as much as $12.50 per copy of that chart-topping release. New releases rarely dropped much below $10 each. New releases were never more than $1-2 above our cost to stay competitive, and we could only afford another $1 on the bigger release margins. To continue in business (which ultimately didn't happen) we needed the extra money you think we would get. Selling tons of copies of Britney and N Sync and the like only made us $2 a copy. That's not much, whether looking short or long term. The most money we made on a single-CD album was those Sound Savers/etc that you see for $8-11 in stores. Those cost us, on average, $7.49 and we'd mark them up to $11.99. I logged countless hours on the phones with distributors, one-stops, importers, and the like trying to find best prices every time some release was expected to be huge. I spent a year being the purchase agent for a record store; I'm aware of what the business is like. Just because you worked retail somewhere doesn't make you an expert, please don't spout like you are.
Reuters story
LOS ANGELES (Reuters) - Billionaire oilman Marvin Davis would drop his bid to acquire the entertainment assets of Franco-American conglomerate Vivendi Universal if Vivendi sells Universal Music to Apple Computer Inc., a source familiar with the situation said Friday.
The source, speaking on condition of anonymity, said Davis was uninterested in pursuing his $15 billion bid for Vivendi Universal Entertainment if Vivendi either sold its music group to Apple, which sources have confirmed it is in talks to do, or pulls the unit off the market entirely.
"The Davis proposal from the beginning has always been for all the entertainment assets, and the music group is essential," the source said. "The transaction doesn't make sense without it."
The source then added, "If this (the Apple deal) were to happen or if Vivendi was to decide they would keep the music group, the Davis proposal would be withdrawn." This would seem to throw a wrench in the works.
These are short runs, and therefore VERY expensive. Most of this cost is in making the Glass Master, the "stamper", to make the CD's. After this is made, the costs per unit fall precipitously. On huge 100,000+ runs of Bleatles CD's, or AOL-branded coasters, the unit cost is negligible. The most expensive part is the jewel case, which is where Digipaks came in.
Please feel free to mod me down for 'BS', as usual :-)
Hands up everyone who refuses to obey orders.
Just remember that those numbers are not profits, they are income. Profits are what is left over from your income after you have subtracted all of your costs such as electricity, salary, insurance, loans, etc.
Yes, companies are probably making a tidy profit on CDs, but it is nowhere near $6 a CD.
Sapere aude!
Steve said consumers have not been given the choice, a real choice, to purchase music. Right now your options are to steal the music or to put up $15 for a cd. Given another choice, of downloading the music for a small fee (a nickel, a dime, a quarter, a dollar--who knows, but licensing the music won't give Apple the option of pricing it according to what the market will bear), Steve is betting that you'll put up your nickel. Aside from the moral dilemmas of stealing, one also has economic factors involved, such as, how long will the download take, will the spyware trash my system, etc. So paying pocket change for a song may be even more economically feasible than downloading it.
I think it makes perfect sense. Steve is practicing what he preaches, he's thinking different. No one in the record industry is willing to consider it. Go Steve, Go!
subscription-free link to LA Times story
Vegas has video tools equal to Final Cut Pro, and audio tools that are far superior -- its parameter envelopes and other features revolutionized the audio workstation UI a few years back, lending much to programs like Nuendo and SONAR. Vegas doesn't have OMF support, which means it doesn't play well with Avid, but it's a pro tool.